EUR/usd
The minutes of fomc's meeting on July 31 – August 1 had more specifics about them than usual. As has been noted, the Fed is prepared to launch the programme of economic incentives if the figures remain that poor. Such news certainly filled the markets, especially currency ones, with enthusiasm. The risk-sensitive EUR/USD grew from 1.2470 to 1.2530 within just 3 hours. It's worth mentioning that already before the release, during the day, the euro had been in good demand, cementing its positions above the previous highs. At the moment the single currency is trading close to the seven-week highs, near 1.2550. The suppositions that the Fed may launch the QE already in September give a boost to the markets. S&P is again in the growth phase, oil and other risk-sensitive assets are also on the rise. Despite the fact that we expect further growth of the euro in the near future, we should be careful with the forecasts for the coming weeks. Our target – 1.26 – is within the reach and can be gained already today or tomorrow. However, apparently the upward move may go further, driving the pair already to 1.2850. The 200-day MA is right about this level now. At present we don't expect any threat from economic indicators and this is also sure to support the markets. What can really pose a threat is the comments of FOMC's members with Ben Bernanke at the head. The next important performance of his is scheduled for the end of the coming week (August 31), and till that time there is still some room for growth. Moreover, at the end of this week Greece's Prime Minister meets the Chancellor of Germany. While the matter doesn't go farther than mere discussions of future agreements and no real action in terms of money allocations and easing of lending terms is taken, we can hope for good news. In other words, while it is still summer the markets have every prospect to stay in the green zone.
GBP/USD
Sometimes it is good to see the return of old correlations in Forex. One of such is growth of the pound on the fall of the dollar. Besides, at such moments the sterling outstrips in its dynamics not only the dollar, but also the euro and aussie. It is a really surprising performance for the currency of the country, which has been suffering the economic slowdown for three quarters in a row, has the trade deficit close to the record levels, the budget deficit twice as high as in the euro zone (8% against 4%) and the lowest number of mortgages in the last 4 years. Today we'll see fresh information on mortgage volumes in July. Actually, we'll hardly see any obvious improvement in this pre-Olympic month.
USD/JPY
Among everyone's jubilation about growing chances of the QE launch in September, there are still those who have been utterly disappointed by yesterday's weakness of the dollar. FOMC's minutes influenced not only the price of the dollar, but also the dynamics of American bond yields. The yield of treasuries has gone down, which reduced the spread between yields of American and Japanese bonds. Under such circumstances liquidity from the USA became less attractive than liquidity from Japan. As a result, USD/JPY dropped down to 78.50, almost by half a big figure within a few hours. Such a strong motion had been last seen only at the end of May. The summer calm has dispersed.
AUD/USD
All this fuss with the ‘dovish' minutes of FOMC managed to swing the Aussie round. The currency survived the terrible reports of Australian mining corporations, the incomes of which have shrunk by 1/3 in comparison with the previous year. The Aussie managed to close out the day positive above 1.05, though the daily low was set at 1.0412. Shall we expect a retest of 1.06?
